Panama City, Panama (BBN)-Panama is creating an international panel to help improve transparency in its offshore financial industry.
The move follows the leak of millions of documents from law firm Mossack Fonseca, showing it helped some clients evade tax and avoid sanctions, reports BBC.
Several countries are probing possible financial crimes by the rich and powerful in the aftermath of the leak.
President Juan Carlos Varela said Panama would work with other countries over the revelations.
"The Panamanian government, via our foreign ministry, will create an independent commission of domestic and international experts," he said in a televised address.
The panel, he said, would examine working practices and propose measures that could be shared to strengthen the transparency of the financial and legal systems.
Correspondents say the president is eager to defend his country against a "media attack" by wealthy countries that he says are unfairly stigmatising him following the leak.
Mossack Fonseca, for its part, says that it has been the victim of a hack.
Mossack Fonseca partner Ramon Fonseca insisted the leak was not an "inside job" - the company had been hacked by servers based abroad.
It has now filed a complaint with the Panamanian attorney general's office.
Mossack Fonseca has accused media organisations reporting the leak of having "unauthorised access to proprietary documents and information taken from our company" and of presenting this information out of context.
The revelations have already sparked political reaction in several countries where high-profile figures have been implicated.
On Tuesday Iceland's Prime Minister Sigmundur Gunnlaugsson stepped down after the documents showed he owned an offshore company with his wife but had not declared it when he entered parliament.
BBN/SK/AD